IPI gas pipeline likely to be delayed till September

New Delhi, June 29 (UNI) The agreement on the proposed 7.4 billion dollar tri-nation (IPI) gas pipeline is likely to be delayed by few months, as India and Pakistan have shown resentment over Iran's last minute changes in gas pricing formula.

This resulted as Iran kept on reiterating to insert a clause for revision in the agreed pricing formula every three years.

''We will not be able to quit the project as we have already invested four billion dollar in laying pipelines from Iran-Pakistan border to Pakistan-India border and from there to consumption centres in India,'' sources said here today.

The agreement, scheduled to be signed later next month, will now be late till August-end or September, they added.

Pakistan Petroleum Secretary Ahmad Waqar said, ''Indian and Pakistani ministers are expected to meet in Islamabad next month to conclude the agreement on the transit fee.'' Iran's special representative of Petroleum Minister H Ghanimi Fard said a separate tri-lateral ministerial level meeting is expected to take place in Tehran to conclude the project agreement.

Petroleum Minister Murli Deora said that India is actively pursuing import of natural gas through the pipeline.

''We have reached a great extent on the 1,050 km long pipeline, and only small things are pending which will be resolved by next month,'' Mr Deora said.

All the three nations are totally committed to the project, he said.

To take deliveries of gas at Iran-Pakistan border, India and Pakistan will sign separate agreements with source nation Iran, while India will separately pact with Pakistan for transporting gas through its territory.

Mr Waqar said Pakistan was committed to the security of the pipeline as two-third of the pipeline length in that country would be used for transporting the gas for its internal use and only 240-km would be for transporting gas for India.

''We assure that we will secure the pipeline,'' he said.

Earlier in the day, Iran has assured India of beginning the supply of gas by 2011 and release 60 million cubic metre per day in the first phase to be shared equally between India and Pakistan under the 7.4 billion dollar pipleline project.

In the second phase, an additional 90 million cubic metres of gas will be supplied to the two countries with the delivery point at the Iran-Pakistan border.

''We are assuring that 30 mcumpd of gas will be provided to both India and Pakistan each in the initial phase, which will start off by 2011,'' Iran's special representative of Minister of Petroleum H Ghanimi Fard told reporters on the last day of the two-day meeting with the Indian officials here.

Petroleum Secretary M S Srinivasan said that all the major issues regarding the proposed pipeline have been resolved.

''All the major elements have been thrashed out, apart from minor issues which will also be resolved by July-end during the ministerial level meeting in Pakistan,'' Mr Srinivasan said.

Pakistan had earlier sought a transportation tariff of 0.70-0.75 dollar per million British thermal unit (mBtu) while India was willing to pay 0.55 dollar per mBtu.

On transit fee, Islamabad is demanding 0.493 dollar per mBtu while New Delhi is willing to pay 0.20 dollar per mBtu.

The cost in gas-deficient India will be about seven dollars mBtu that includes transportation and transit charges to be paid to Pakistan, experts in the industry said.

This price is much higher than the rates being offered by Reliance Industries for its gas from the Krishna Godavari basin on the Andhra coast.

Earlier, India and Pakistan had agreed to the price formula proposed by Iran which is placed at 4.93 dollars per million British thermal unit (mBtu).

Both the countries have sought the price to remain unchanged for 25 years, the time span for the supply contract.

But, Iran sought a revision in the pricing formula every three years based on international fuel prices on the supply of gas through pipeline last evening.

The objections over the proposed pipeline from the US stems from fears over Tehran's nuclear enrichment programme.

UNI